Heading for the exit
Four years ago, shipping company Grindrod awarded millions of shares to its senior executives, as an incentive for them to guide it through the waters of international trade.
CEO Alan Olivier accepted 600,000 Grindrod share options at a strike price of R13.65.
His colleagues, executive directors David Polkinghorne and Andrew Waller, were awarded 150,000 shares and 300,000 shares respectively at the same price.
They must wish they could have exercised their options the following year, as Grindrod rode a wave of success, fuelled by a resurgent commodities market and booming international trade.
By mid-2014 the stock had leapt to close to R29. But then it started sinking, following commodity prices down.
It reached a low of 875c in February this year.
At the time of writing the share closed at R11.32. But the first portion of the share options awarded in 2012 vested in the last week of May, well below the strike price.
Thus the directors — Olivier, Polkinghorne and Waller — each received a third of the shares they had been awarded.
In order to settle their resultant tax liability, Waller and Polkinghorne decided to sell some of their shares, says Grindrod.
True to his status as captain of the ship, expected to be the last man on board the vessel (even when it is loss-making and sinking), Olivier held on to all his stock.
He said in February: “Despite the fact that we have losses, we are cash-generative. So the balance sheet is strong.”
The management team points to the weak global economy, as well as less than stellar commodity markets, as the reason behind the dip in the company’s performance.
At Famous Brands, four key directors, members of the founding Halamandres family, sold shares worth R492m.
These are the key movers and shakers at the fast-food retailer, their involvement going back to the company’s roots three decades ago.
Through the Panis Trust, Panagiotis Halamandres sold 1.5m shares to bank R181.5m, the same amount as Theofanis Halamandres. Periklis Halamandres sold R121m worth of stock while John Lee Halamandres offloaded R8m in Famous Brands shares.
None offered any explanation for their respective sales, necessitating a call to the company. And that is where matters got really interesting: Famous Brands has outsourced its investor relations service to a Rosebank-based communications consultancy, Instinctif.
After initially offering to provide a response on behalf of the company, Instinctif’s account manager for Famous Brands backtracked and asked for written questions, which she said she would forward to the company. Famous Brands would then send the response to Instinctif, which would then forward it to the Financial Mail.
When we offered to cut the red tape by calling the company directly, the Instinctif account manager responded: “I don’t have the phone number.”
To cut a long story short, the number miraculously appeared when the Financial Mail insisted on talking to Famous Brands, but not before the consultant rang a person at the company while forgetting to mute our call, which was on hold: “But he wants to talk to you, can I give him the number?”
The gatekeeper invented another fib when confronted about the first one: “I had to Google the number.”
This was apparently all in an attempt to prevent the company’s investors from finding out why influential shareholders, with a combined 29% interest in the company, were selling off some of their shares.
Instead a colleague of the first person we dealt with called to rebuke us for “giving the lady a tough time”. Needless to say, Instinctif will smile all the way to collect its consultancy fees — paid from the investors’ funds.
Famous Brands group strategic adviser Kevin Hedderwick later said the Halamandres directors were only selling “to rebalance their portfolios. There is nothing sinister; their sales have been negligible over the past 20 years. They are still by far the largest shareholders in the business.”